Categories

Posts tagged ‘HIGH’

GBP/JPY jumped to as high as 126.06 last week and met mentioned target of 100% projection of 117.29 to 122.04 from 119.58 at 124.33. Initial bias remains on the upside this week and further rise should be seen towards 127.30 resistance, which is close to 161.8% projection of 117.29 to 122.04 from 119.58 at 127.26. At noted before, we’re treating rebound from 117.29 as the third leg of consolidation pattern from 116.83. Hence, we’d expect upside to be limited by 50% retracement of 140.02 to 116.83 at 128.42 to finish the consolidation and bring down trend resumption. Below 124.49 minor support will turn bias neutral first. Break of 122.04 should then bring retest of 116.83 low next.

In the bigger picture, the choppy decline from 163.05 is viewed as part of the down trend from 251.09 and there is no clear sign of reversal yet. Such down trend is expected to continue after consolidation pattern from 116.83 finishes and target 110 psychological next. However, sustained break of above mentioned 128.42 will raise the odds that GBP/JPY has bottomed in medium term and will turn focus back to 140.20 resistance for confirmation.

In the longer term picture, fall from 251.09 is treated as resumption of multi decade down trend. Fall from 163.05 could be a wave five based on it’s choppy structure and lack of decisive momentum. After all, there is no sign of bottoming yet and GBP/JPY is still in favor to target 61.8% projection of 215.87 to 118.81 from 163.05 at 103.06, which is close to 100 psychological level, before the cross bottoms.

On Wednesday Pound/Dollar traded within almost 70 pip range. The Cable depreciated from 1.5737 to 1.5669 yesterday, in converse with the positive Interbank sentiment at above +35%, closing the day at 1.5691. Today the British Pound descended slightly further down to 1.5658. On the 1 hour chart range trading is forming, while on the 3 hour chart the upward channel is on hold. First resistance is yesterday’s peak at 1.5737. Break above it should extend the bullish movement further towards 1.5861. The nearest support level is today’s bottom at 1.5658. Going bellow it should extend British Pound’s reduction further down towards next downward objective 1.5536. There are no major economic events for UK today. Quotes are moving just bellow the close 20 and 50 EMA on the 1 hour chart, indicating slim bearish pressure. The value of the RSI indicator is negative and declining, MACD is negative and tranquil, while CCI has thinly crossed down the 100 line on the 1 hour chart, giving over all light short signals.

After falling around 40 pips in the American session from 78.60/70 high zone to break 78.40 support and reach intra-day low at 78.18, the USD/JPY seems to have found support at this level with the pair moving in range between 78.20 and 78.35 where the january 25th high placed at 78.28

USD/CAD continues to oscillate around the 200 day moving average at 0.9985 and has done so for over one week, comments Karen Jones, analyst at Commerzbank. “Scope remains for a slide back to the October low at 0.9892 which is expected to hold the downside”.

According to the analyst, the market will find initial resistance at the December low and the 3rd January low at 1.0049/73, but key short term resistance is the 55 day ma and the 3 month downtrend at 1.0149/46. “This will need to be overcome for immediate downside pressure to diminish, something which is not likely to be seen this week, however”, said Jones.

“Only an unexpected drop and two daily closes below the October low at 0.9892 would point towards further range trading with a bearish bias, something we do not envisage happening at present”, Commerzbank analyst concluded.

Calendar

Risk Disclosure

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.